A6/M1 SSARS Engagements

Question 1

what are the 3 levels of services under SSARS?

Answer 1

1. Preparation: No assurance. Independence NOT required
2. Compilation: No assurance. Independence NOT required, but if not independent, must disclose
3. Review: Limited assurance. Independence required. A review is based on inquiry and analytical procedures

Note:
- services below are not required to comply with SSARS:
+ reproducing client-prepared FS, without modification
+ prepare journal entries
+ prepare FS solely for tax, in conjunction with litigation services, written personal financial plans, or in conjunction with business valuation services
+ review interim financial data required to be filed with SEC
+ provide blank FS format or template
+ provide client with software to generate FS
+ other services other than prepare, compile, and review FS

• when performing a compilation or review of FS of a nonissuer, the auditor should be able to justify departure from SSARS

Question 2

what should auditor report if providing more than one service?

Answer 2

issue report for the highest level of service rendered

Question 3

what is required to be accompanied with a compiled FS under SSARS?

Answer 3

a compilation report

Question 4

what is the precondition for accepting a compilation engagement?

Answer 4

client’s management attitude and integrity

Question 5

what is internal control role in services under SSARS?

Answer 5

in SSARS engagements, the design, implementation, and maintenance of IC is management’s responsibility. Auditor do not have an obligation to understand IC structure